How LendingClub Wants to Make History
LendingClub (NYSE: LC) recently announced plans to acquire Boston-based Radius Bank and its bank charter. LendingClub will pay $185 million for the privately held community bank with $1.4 billion in assets, valuing the company at 1.72 times tangible book value in a deal that is 75% cash and 25% stock.
The acquisition is viewed as a landmark purchase because it makes LendingClub the first fintech to buy a bank in order to obtain its banking charter. The move bypasses the more traditional approach of actually applying for a charter, which other fintechs such as Square (NYSE: SQ) have pursued. LendingClub undoubtedly has a long and cumbersome process ahead to receive regulatory approval. But if it does, I think the company has a ton of upside.
Image Source: LendingClub Corporation
Source Fool.com
